Which of the following is the basic tenet of new classical economics?
a. A change in the fiscal policy affects the equilibrium level of real GDP but has no impact on the equilibrium price level.
b. A government-induced shift in aggregate demand affects the real GDP only if they are expected by the economic agents.
c. A change in aggregate demand affects the aggregate price level only if the aggregate supply curve is perfectly elastic.
d. A change in monetary policy affects the equilibrium level of real GDP only if those changes are unexpected.
e. An expected change in a monetary or fiscal policy leads to a proportional shift of the long run supply curve.
d
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Refer to the scenario above. If both economies have identical depreciation rate, then:
A) economy A's steady state equilibrium will lie to the left and above economy B's steady state equilibrium. B) economy A's steady state equilibrium will lie to the right and below economy B's steady state equilibrium. C) economy A's steady state equilibrium will lie to the left and below economy B's steady state equilibrium. D) economy A's steady state equilibrium will lie to the right and above economy B's steady state equilibrium.
If the demand curve is perfectly elastic, then an increase in supply will: a. increase both the price and the quantity exchanged
b. increase the price but result in no change in the quantity exchanged. c. increase the quantity exchanged but result in no change in the price. d. decrease the price but result in no change in the quantity exchanged.
Answer the following statement(s) true (T) or false (F)
1. Relative to mobile sources, stationary sources are bigger emitters of sulfur oxides. 2. Acidic compounds are formed from a chemical reaction in the earth’s atmosphere, involving sulfur dioxide, nitrogen oxide, water vapor, and oxidants. 3. Acid rain is a local pollution problem. 4. Of the two major pollutants responsible for acid rain, sulfur dioxide (SO2) is the more significant. 5. Major sources of SO2 emissions are automobiles and other mobile sources.
Net exports are negative when:
a) a nation's imports exceed its exports. b) the economy's stock of capital goods is declining. c) depreciation exceeds domestic investment. d) a nation's exports exceed its imports.